thenextwave

A telecoms story about competition and infrastructure

Posted in business, economics, organisational, trends by thenextwavefutures on 24 July, 2007

I haven’t been able to blog for more than a week because the line which has my broadband connection on it went down so I’ve barely had any internet access. But the experience of getting my phone supplier to get BT (the wholesaler) to sort out my fault, which was at the BT exchange, did make it clear to me that the present telecoms model is in no-one’s interests other than BT’s.

What happens with faults is this: third party re-seller reports fault to BT (which has a wholesaling division which is supposed to maintain a level playing field for all service providers, BT retail included). BT analyses it and sorts it out. In my case they weren’t very good at this: they breached their service level agreement with my provider, in terms of the length of time they took to restore the service, and one of the reasons for this was having accepted that the fault was at the exchange, it turned round and decided that the problem was some unidentified (and non-existent) equipment attached to the my line.

Maybe the detail isn’t important. But from a customer point of view, I can’t tell whether this is just because BT is inept or whether it is monopolistic behaviour (yes, they are supposed to keep a level playing field, but when it comes to re-sellers maybe they just don’t care that much whether there are some bumps and ruts on the pitch).

What’s lying beneath this is a change in view about how competition works. Originally, when BT was privatised, the rigours of the market was supposed to do it, together with a modestly sized competitor (Mercury). Now we think it takes more than that, and also understand the importance of open infrastructure in enabling competition. The current ‘level playing field’ model is effectively a lash-up by the regulator to try to open up the infrastructure. (There are physical problems – since a lot of the equipment is in BT buildings). But it’s not going to work fairly until the infrastructure is run by a genuinely independent infrastructure company – along the model of Railtrack for the rail industry. At least then you know that if you get poor service it’s because they company is incompetent.

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